The Conservative-led coalition government has been committed to shrinking the state and this has had a major impact on local government. This article examines the consequences of austerity measures for staff participation and pay determination in UK local government. Local government has been particularly hard hit by austerity measures and this has encouraged employers to change terms and conditions, review forms of staff participation and cut jobs. The implications for the institutional resilience of systems of employment regulation and employee involvement in the sector are considered.

The crisis has had major consequences for public service employment relations in the liberal market economies of the UK and Ireland. However, variations in the process of fiscal consolidation reflect different legacies of social partnership, prior patterns of public management reform and different relationships to the eurozone. The measures adopted nevertheless reflect a similar concern to decrease public sector employment, worsen pay and conditions and increase work effort. Despite the deterioration of terms and conditions of employment, industrial action has been muted, reflecting the severe weakness of trade unions. Both cases illustrate that governments have become less concerned to gain trade union support to push through austerity measures.

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